Having already seen its share price rise by 76% in the past 12 months, could Domino's Pizza Enterprises Ltd (ASX: DMP) continue to climb higher?
Based on the outstanding first quarter result and upgraded full year guidance there is a very real possibility that it could.
Here's what investors learned at yesterday's annual general meeting (AGM)…
Guidance for same store sales (SSS) across the Australian, New Zealand and European operations has been revised higher. In the first quarter, SSS across ANZ were up 14%, while SSS in Europe were up nearly 8%.
Commenting on the lift in SSS, Managing Director Don Meji noted that "the strong positive momentum we are experiencing in Australia and New Zealand is largely attributed to the implementation of the GPS Driver Tracker technology over the past couple of months which allows customers to track their order from store to the door."
Guidance for new store openings was also revised higher with the range increased from 180 to 200 stores to between 260 and 280 stores.
Perhaps most importantly of all, full year 2016 guidance for both earnings before interest, tax, depreciation and amortisation (EBITDA) and underlying net profit after tax (NPAT) was upgraded to growth of 25% on the prior year.
Should you buy a slice of Domino's?
Domino's impressive growth rate has been nothing short of astounding and the group's profit growth has been reflected in strong share price appreciation.
No doubt some analysts will be revising their forecasts higher on the back of the AGM update, however even after any upgrades the stock is still likely to be trading on a forward multiple of around 50 times which wouldn't appear to leave much room for error.
In contrast, other quick service restaurant type businesses such as Collins Foods Ltd (ASX: CKF) and Retail Food Group Limited (ASX: RFG) are trading on seemingly undemanding multiples of approximately 12 times and could be safer investment options for investors who require a margin of safety.